Only six states complying with “Renewable Purchase Obligations” targets; others undermining centre’s targets

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Press release - January 19, 2018

New Delhi 26 December, 2017| Only six out of twenty nine states & seven UTs are complying with the centre’s Renewable energy Purchase Obligation (RPO) targets, according to new analysis by Greenpeace India. The report, a follow up to a similar analysis in 2013 shows that nothing much has changed in the last four years in terms of states complying with the renewable energy targets set by the Central Government, or even the ones set for themselves. Among the notable laggards are Gujarat, Madhya Pradesh, Maharashtra, Chhattisgarh, Tamil Nadu, Goa, Punjab, Delhi and Uttar Pradesh. In contrast, Andaman and Nicobar Island, Karnataka, Himachal Pradesh, Andhra Pradesh, Nagaland and Meghalaya are meeting or exceeding the targets.

Pujarini Sen, Campaigner, Greenpeace India said “There is no significant change in the RPO performance in last 4 years. Despite setting an ambitious national target of 175 GW of non-fossil fuel energy by 2022 towards the Paris Agreement, consistent non-compliance with the domestic targets reflects reluctance on the part of many state administrations towards the renewable energy transition.”

“Setting ambitious targets alone won’t fulfil the Renewable Energy Obligations leave alone national target of 175 GW installed solar and wind. It is up to the government and the DISCOM (whether government or private) to fulfil the target.States such as Meghalaya have fulfilled over 200% of the target and states such as Manipur have fulfilled zero. Similarly, while Tamil Nadu is a laggard, Karnataka and Andhra Pradesh have been performing well.This disparity among the states, even from the same region, shows that the country has the potential and resources to fulfil the targets, but the government and nodal agencies lack in intent.”

With solar and wind tariffs falling sharply, these sources are now cheaper than 2/3rds of India’s existing coal power generation. Separate analysis by Greenpeace (LINK) shows that replacing the most expensive coal power plants with electricity generated by solar and wind can save discoms and consumers up to 54,000 crores. Indebtedness of DISCOMS is no longer a valid excuse after the UDAY scheme that has restructured DISCOM debt.

A major reason for poor state performance is the lack of a penalty for non-compliance. Meeting RPO commitments should be a non-negotiable condition for future relief for DISCOMS under the UDAY scheme. Continued non-compliance on the part of states could jeopardise the national renewable energy targets.

“Renewable energy now provides us with a rare win-win opportunity that the country must take advantage of,” said Send. With the recent cost declines of solar and wind, DISCOMS now have a strong economic incentive to prioritise their renewable energy purchases over those from coal power. CEA data validates that most existing coal power tariffs are considerably higher than bids for new solar and wind, with new records being set below Rs 2.50 for both sources. Phasing out purchases of coal power and replacing it with cheaper renewable purchases will benefit DISCOM finances and help India tackle the problem of hazardous air pollution, to which coal is a major contributor”.

Note:Importance of Renewable Purchase Obligation:RPO binds the states legally as per the section 86(1) (e) of Electricity Act, 2003, where a fixed percentage of Renewable sources is to be included in the energy mix and every state is mandated to include solar in the renewable mix. And more importantly:

The RPO mandates the DISCOMS to buy/produce a fixed percentage of electricity from renewable sources.

DISCOMS can also meet their targets by purchasing REC’s or Renewable Energy Certificates.

Such RECs allows inter-state/intra-country trading of emission/energy certificate much like the international Clean Development Mechanism, or CDM.